Reports Provide Mixed Outlook

U.S. consumer sentiment fell in October as rising energy costs and persistent job worries made Americans less optimistic about the future, according to a survey released Friday.

The University of Michigan said its consumer confidence index dropped to 91.7 in October, down from 94.2 in September but higher than a preliminary reading of 87.5.

Analysts in a Reuters poll had forecast that the index would slip to 88. The measure of current conditions climbed to 104 from 103.7, while the expectations component slid to 83.8 from 88.

Consumer confidence is watched as a gauge of future spending, which accounts for two-thirds of the U.S. economy, although the correlation between sentiment and actual shopping patterns has not been strong in recent years.

Meanwhile, a private group’s measure of Chicago-area business unexpectedly accelerated to the highest since 1988.

The National Assn. of Purchasing Management-Chicago said its regional index rose to 68.5 this month from 61.3 in September. Readings higher than 50 indicate growth, and October is the 18th month of uninterrupted expansion. Economists expected the index to fall to 59, the median of 54 forecasts in a survey by Bloomberg News.

The Labor Department’s separate employment cost index showed labor expenses for companies rose 0.9% in the third quarter, the same as in the second. Benefit costs rose 1.1% after a 1.8% increase. Wages and salaries rose 0.7% after rising 0.6%. The 2.4% increase in wages and salaries from a year earlier was the smallest ever.

Bloomberg News was used in compiling this report.